Chinese LED companies overweight "overseas purchase" optimism still needs to be cautious

According to Bloomberg News, in less than three months in 2016, the amount of overseas M&A transactions by Chinese companies has reached 70.8 billion U.S. dollars, more than half of the total transaction amount last year.

In fact, since the beginning of this year, Chinese companies have accounted for 47% of global cross-border transactions. It is foreseeable that the 2016 we are in will become the overseas M&A year for Chinese companies, and there is no doubt that the industry big list will continue to be frequent.

Accelerate overseas markets

"As a listed company, after accumulating basic manufacturing, market development, capital accumulation and other strengths, in addition to the layout of the domestic market, it should continue to expand overseas, and through integration to achieve large enterprise scale, through cross-border acquisition to achieve enterprises Diversified development," said Lin Jilin, executive director of Mulinsen.

Indeed, in recent years, the domestic market has frequently experienced the development of “more meat and less meat”, and more LED companies have begun to turn their attention to overseas markets.

According to the statistics of the High-tech Research Institute LED Research Institute (GGII), China's LED product exports reached US$10.2 billion in 2015, up 10.95% from 2014's US$9.2 billion. Take LED tubes as an example. In 2015, the export volume was 927 million. The US dollar (including the bracket light) increased by 12.66% compared to the US$823 million in 2014.

With the accelerated development of overseas markets of LED companies, overseas business has indeed grown rapidly. In the case of Eliad, the 2015 annual performance report pointed out that the company's overseas orders have reached 494 million yuan, an increase of 7.68 times compared with 2012's 0.57 billion yuan; And after successfully acquiring US Pingda last year, the company will achieve the goal of “global business balanced development” in 2016, forming a gratifying situation for both domestic and overseas revenues.

For this reason, the current gratifying situation has also prompted more LED companies to go overseas. At the same time, for companies with strong capital, actively expanding various marketing methods will undoubtedly become a way for the company to expand overseas channels.

For example, Sanxiong Aurora and Yingchao Manchester City have recently entered into a strategic cooperation. Lenovo’s previous successful Lehman Optoelectronics titled the Portuguese League, the efforts of Chinese LED companies in laying the road of overseas channels can be described as extremely fierce.

“We have cooperated with Premier League Manchester City and have signed a two-year contract to span the two seasons of 2016-2017 and 2017-2018. As an opportunity to become the official lighting partner of Manchester City Football Club in China, Sanxiong also hopes to upgrade the brand. The overseas market has been able to reinforce and accelerate the breakthrough.” Zhang Yutao, general manager of Sanxiong·Aurora, said.

At the end of last year, Sanxiong Aurora has submitted a listing application to the China Securities Regulatory Commission. It has been pre-examined and is in the process of completing the listing and is expected to be in 2017.

Giant sell-off

"With the development of the industry, a large amount of capital is constantly flowing in. LED companies are facing a cruel fate of survival of the fittest. Since 2015, the industry has integrated mergers and acquisitions frequently, and began to choose a deep industrial chain to produce and sell high value-added products." Dr. Zhang Xiaofei, Chairman of the Research Institute, pointed out.

According to the incomplete statistics of the High-tech Research Institute LED Research Institute (GGII), there have been more than 50 cases of mergers and acquisitions in the industry chain in 2015. The total amount of mergers and acquisitions has exceeded 40 billion yuan, including many cases in which Chinese capital acquired foreign brand lighting companies. The tide of overseas mergers and acquisitions is on the rise.

"Because of the rise of LED lighting companies, this year, international lighting giants began to spin off their original traditional business. The so-called 砒 吾 吾 吾 之 之 蜜 , , , , 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾 吾Class assets." Industry veterans said.

Nowadays, the most striking thing is that the international lighting giant Osram has split the sale of lighting assets, which is attracting domestic LED listed companies to compete for bids.

"Osram's sale of Foshan Lighting's equity and spin-off of the general lighting business is under the impact of the LED technology revolution in recent years. The rise of China's LED lighting companies, low prices have become an enterprise advantage, making traditional lighting giants such as Europe and the United States have to make strategic adjustments." In the eyes of the industry.

Among them, on the one hand, the foundation and strength of China's lighting industry are gradually increasing. On the other hand, the huge domestic production capacity encounters foreign trade barriers and the competition is fierce. The acquisition of Osram's spin-off assets will help enterprises go out to find the blue ocean and upgrade China. Corporate branding and internationalization.

“The mergers and acquisitions in the LED industry are frequent. Under the opportunity of accelerating the global integration process, Chinese LED companies must take a long-term view. They should realize that if a company wants to grow and develop, it is far from relying on endogenous forces. Not enough, but also need to rely on the external forces of mergers and acquisitions, internal forces and external forces complement each other, can be icing on the cake." Wang Liyang, deputy general manager of Hongli Optoelectronics said.

GG-LED Xiaobian believes that if the early overseas mergers and acquisitions of LED enterprises belong to the stage of crossing the river by feeling the stones, nowadays, after gradually accumulating experience, the need is more peaceful. At the same time, from the perspective of rational acquisition and risk prevention, each company needs to combine its own development and consider the way and significance of overseas mergers and acquisitions.

The benefits of LED companies overseas mergers and acquisitions:

1. Complementary patent resources

In general, domestic LED listed companies acquire overseas companies, gaining advanced technology and breaking the patent threshold is the main purpose. Through mergers and acquisitions, mastering the global advanced patent technology can effectively reduce the risks and costs of enterprise development, make full use of the experience curve effect, and gain product competitive advantage.

For example, the acquisition of Purui by Jingjing is equivalent to controlling more than 750 patents and cross-licensing patents with Cree, and mastering many core technologies such as chips, epitaxial wafers, packaging, optical design, white light, etc. , Japan and South Korea and other global high-end LED industry supply chain.

2, the brand channel double harvest

Overseas mergers and acquisitions are an effective means for Chinese companies to quickly enter the international arena and expand overseas markets. With the help of foreign mature brands and existing market channels in foreign countries, the market development cycle can be greatly shortened. For example, Liard acquires Pingda Electronics, expands the sales range of existing LED display products, and facilitates LED small-pitch TV to overseas markets. permeation of.

(notable) Risk assessment of the national conditions of the M&A countries:

Unlike domestic mergers and acquisitions, overseas mergers and acquisitions will face many challenges from politics, law, finance, and personnel. LED companies need to understand and support the national conditions of mergers and acquisitions, and in order to enable enterprises to quickly transform and upgrade in a complex political and turbulent economic environment, they will make great strides in the international market.

For example, in the case of overseas mergers and acquisitions in 2015, the most notable was the acquisition of Lumileds owned by Royal Philips of the Netherlands by Jinshajiang Venture Capital Group. However, it was regrettable that this acquisition was rejected by the US government and was not completed.

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